Secretary of State Condoleezza Rice is in Saudi Arabia to inaugurate a new strategic dialogue with the U.S. Gulf ally. Earlier in Bahrain, a conference aimed at promoting Middle East political reform ended with a setback, as delegates failed to produce a final document.

The drive for political reform in the Arab world is a policy priority for the Bush administration. While officials traveling with Ms. Rice were disappointed by the outcome in Bahrain, they minimized its importance, amid what the Secretary of State said has been a tremendous expansion of liberty over the past year in the broader Middle East.

The second annual Forum for the Future, in the Bahraini capital, Manama, including Arab and North African states, and the Group of Eight industrialized countries, was capped by an agreement setting up two new entities to promote reform institutions and small-scale economic enterprise in the region.

However, in a result called disappointing by U.S. officials, the conference ended with no final statement, after Egypt sought to introduce language that members of the U.S. team said would restrict activities of non-governmental organizations, NGO's.

Diplomats said the Egyptians wanted the document to state that only NGO's legally registered by a country should get assistance from the forum's new aid entities.

U.S. officials said it was better to end the meeting with no final statement, rather than one with no mention of the NGO's.

They also spoke of progress elsewhere, saying, among other things, that Arab delegations did not insist that progress on the Israel-Palestinian conflict be a condition for acting on reforms.

In her policy statement to the conference Saturday, Secretary Rice cited elections by Iraq, Afghanistan, Egypt and the Palestinian Authority as evidence of democratic gains since the first Forum for the Future, in Morocco last year.

She also said Palestinian statehood is within sight, if the parties can make progress on the Middle East peace Roadmap.

But with Syrian Foreign Minister Farouk Shara looking on, Ms. Rice singled out the Damascus government for criticism for its human rights record. "The human longing for justice is a force that is not easily denied. And, we continue to support the peoples of Syria in their aspirations for liberty, democracy and justice. We would like to see an end to the arbitrary detentions of democratic and human rights activists there, including Kamal Labwani and all the prisoners of conscience from the Damascus Spring," she said.

Ms. Rice's reference was to the brief period of open debate in Syria that followed the death of President Hafez Assad in June of 2000, but which was later quelled by the government of his son, Bashar.

Kamal Labwani is a former political prisoner and democratic activist, jailed again just days ago, after returning to Syria, from a visit to the United States and Europe.

President Bush and Saudi Arabia's King Abdullah agreed to set up the strategic dialogue earlier this year, as a way of further improving the relationship between the two long-time allies.

U.S. officials said the dialogue would include Iraq, energy and security issues, and Saudi Arabia's human rights record, which came under renewed U.S. criticism in a State Department report on religious freedom last Tuesday.

Secretary Rice met Saudi Arabian Foreign Minister Prince Saud al-Faisal here late Saturday, and is to meet the king Abdullah on Sunday, before heading on to Jerusalem for talks with Israeli and Palestinian officials.